PEB-Pacific Edge

[LoungeLizard]

PEB is set to no longer receive reimbursement for its Cxbladder tests from CMS in the US from 23 February 2025. This represents ~60%–70% of its revenue. That's huge.

The upcoming American Urological Association (AUA) guidelines review. If positive, this will act as a key mechanism for PEB to lodge a coverage reconsideration request; if negative, the path forward looks challenged.

FB latest note not very positive and no longer offering a target price. I note that FB own a significant amount of shares on behalf of investors as at last annual report.

Craig's latest underperform (sell in my book) 5 cents.

Is it even worth 5 cents for "a punt" which is all it is. I don't think so. If I was interested I would wait for the upcoming review, if it's negative I reckon it's all over as far as a reversal of the Novitas decision.

A shame really. PEB harp on about how huge the market is in the world and US but it seems doctors are not really buying it. World sales are "corner dairy" stuff and the growth in the US was very small when you consider the market size.

Notice the ceo got $867 in cash remuneration and $22k in shares according to the 2024 annual report. In fact a pay rise from 2023 and was awarded 73 percent of his sti. All for a company that has a very low turn over and has lost over $240m of shareholders funds so far. I also note there are 25 employees earning over $300k. Maybe it's time to review this....

I just hope it survives and best of luck to holders

I think something like 10% of US urologists have employed CXBLAdder in their practice, but you're right, the key milestone now is to have the AUA give it further endorsement by having it included in the guidelines. If that happens, my understanding is that all urologists would be obliged to use it, in the appropriate cases, as a screening tool to avoid unnecessary, costly and invasive cystoscopies. I gather from the conference call that it will be about 3 months for the new guidelines to be made public.

[Greekwatchdog]

I think something like 10% of US urologists have employed CXBLAdder in their practice, but you're right, the key milestone now is to have the AUA give it further endorsement by having it included in the guidelines. If that happens, my understanding is that all urologists would be obliged to use it, in the appropriate cases, as a screening tool to avoid unnecessary, costly and invasive cystoscopies. I gather from the conference call that it will be about 3 months for the new guidelines to be made public.

Do you think PEB would be told in advance of the decision before being made public?

[Basil]

FB latest note not very positive and no longer offering a target price. I note that FB own a significant amount of shares on behalf of investors as at last annual report.

I hear Forsyth Barr stuffed as many as they could into client accounts for which they had full management discretion rather than carry the baby themselves on the underwriting.  Still happy to collect the full underwriting fees though.  FB have been repeat "enablers" of the capital destruction that's occurred here.   I hope it works out for shareholders.  It's refreshing to see FB no longer have a price target.  Hopefully that's a forerunner of them refusing to be an enabler for further capital destruction if PEB want to do yet another capital raise.

CEO's salary and the number of people on over $300K are a real eye opener.  Thanks for sharing.

[winner (n)]

Pacific Edge and Blis Technology both out of Otago Uni ......hmmmm

Should have a course on commercialization

[LoungeLizard]

Do you think PEB would be told in advance of the decision before being made public?

Not sure of the protocol to be honest - will try and find out - but I suspect a draft would be sent to all the relevant parties for comment and input before the decision goes public.

The Novitas decision is a setback for sure, but the pivotal moment for PEB is the AUA guidelines. Get included in that then the Novitas decision looks indefensible and would most likely be reversed on appeal. And the likelihood would be that other insurance providers would start to come on board.  Then it really would be game on.

But getting blanked by the AUA (who have been fully supportive to date) would just about be a mortal blow for PEB. It would no doubt struggle on but the SP would collapse further, a capital raise would be needed and institutional support might vanish. The stakes couldn't be higher.

[SuperMario]

Is it even worth 5 cents for "a punt" which is all it is. I don't think so. If I was interested I would wait for the upcoming review, if it's negative I reckon it's all over as far as a reversal of the Novitas decision.

If wait for the upcoming review and it's positive. Will it be a missed opportunity at 5 cents and the share price take off?

[Shareguy]

If wait for the upcoming review and it's positive. Will it be a missed opportunity at 5 cents and the share price take off?

Yes if it's positive. However the facts are that PEB have not got the study's to support  inclusion according to Novitas.


In conclusion, the Cxbladder line of tests all suffer from insufficient test validation, a foundational problem in which potentially confounding clinical circumstances include non-TCC neoplasms and malignancies and inflammatory conditions of the urinary tract. Cxbladder also demonstrates several population biases, including a foundational study from Holyoake in 2008 that only used Japanese patients from one location. Most of the primary literature regarding Cxbladder test development and performance is funded, if not directly written by, the test's parent company, Pacific Edge Diagnostics. This conflict of interest must be taken into account when reviewing these papers, particularly when there are issues not discussed in Pacific Edge Diagnostic funded papers that are subsequently addressed by non-funded studies, such as the 2019 Davidson study which identified increased false positives in patients with non-TCC malignancies. As a result, CxBladder tests are not reasonable and necessary to support positive outcomes in the management of bladder cancer, and therefore, are not payable.'

[LoungeLizard]

Yes if it's positive. However the facts are that PEB have not got the study's to support  inclusion according to Novitas.


In conclusion, the Cxbladder line of tests all suffer from insufficient test validation, a foundational problem in which potentially confounding clinical circumstances include non-TCC neoplasms and malignancies and inflammatory conditions of the urinary tract. Cxbladder also demonstrates several population biases, including a foundational study from Holyoake in 2008 that only used Japanese patients from one location. Most of the primary literature regarding Cxbladder test development and performance is funded, if not directly written by, the test's parent company, Pacific Edge Diagnostics. This conflict of interest must be taken into account when reviewing these papers, particularly when there are issues not discussed in Pacific Edge Diagnostic funded papers that are subsequently addressed by non-funded studies, such as the 2019 Davidson study which identified increased false positives in patients with non-TCC malignancies. As a result, CxBladder tests are not reasonable and necessary to support positive outcomes in the management of bladder cancer, and therefore, are not payable.'

Actually in terms of clinical trials, the evidence supports CXBladders inclusion, not exclusion. This is where the Novitas decision is very shaky and vulnerable to challenge. As PEB have pointed out, Novitas have rather bizarrely chosen to ignore the 2024 STRATA study which is the most recent, comprehensive clinical utility trial and the first ever randomised controlled trial of a urine biomarker for haematuria evaluation.

Instead Novitas refer back to 2008 and 2019 studies, which were very limited and have been subsequently superseded by further clinical trials. The results of the STRATA study is one of the reasons the AUA - the governing expert body - has been supportive of PEB in its submissions. Yet Novitas didn't even refer to the STRATA study in their reasoning.

If the AUA go one step further and include CXBLadder in their official practice guidelines, you have to wonder how Novitas could continue to ignore both the clinical evidence as well as day-to-day use by urologists. It would be like saying we are right and everyone else is wrong including the clinical experts and practitioners.

[SuperMario]

the 2024 STRATA study which is the most recent, comprehensive clinical utility trial and the first ever randomised controlled trial of a urine biomarker for haematuria evaluation.

Was this study funded by Pacific Edge or independent?

-----------------------

Found the answer

It was funded by Pacific Edge. https://www.auajournals.org/doi/10.1097/JU.0000000000003991

"Funding/Support: Pacific Edge Ltd."

[LoungeLizard]

Was this study funded by Pacific Edge or independent?

-----------------------

Found the answer

It was funded by Pacific Edge. https://www.auajournals.org/doi/10.1097/JU.0000000000003991

"Funding/Support: Pacific Edge Ltd."

True, but trials for new products/tests are most often funded by the company itself, so I don't understand why Novitas seems to be critical of that fact. The  study is peered reviewed and published in the AUA journal. I mean, are Novitas implying that just because PEB had to fund the trial then somehow the results are not worthy of consideration, or worse, tainted? The AUA itself would beg to differ. 

[Ferg]

True, but trials for new products/tests are most often funded by the company itself, so I don't understand why Novitas seems to be critical of that fact. The  study is peered reviewed and published in the AUA journal. I mean, are Novitas implying that just because PEB had to fund the trial then somehow the results are not worthy of consideration, or worse, tainted? The AUA itself would beg to differ. 

I was just about say something similar but you beat me to it.  Clinical trials are expensive and I'm not familiar with any or many studies conducted by third parties at their cost.....why would they?  That's not say there are none but I imagine there are not many 'fairy godmothers' out there paying to test others products.  So long as the clinical trial follows a rigorous process and is peer reviewed then I have less of an issue with who funded it.

[850man]

The post-decision update from PEB says that Novitas didn't even consider the STRATA trial when making their determination. This looked to be the case when I read the finalised LCD. Novitas seemed to place their decision on a 2008 study by Holyoake which is not even specific to CXBladder and about biomarkers in general. A lot of water under the bride in the 17 years since then. It really does look like a highly uninformed decision by Novitas 

[Greekwatchdog]

This from the other side. Posted by Psychic

Study Cx Bladder Monitor - good result and recommendation from over the ditch.

 https://bjui-journals.onlinelibrary.wiley.com/doi/pdf/10.1002/bco2.468

[Left Field]

This from the other side. Posted by Psychic

Study Cx Bladder Monitor - good result and recommendation from over the ditch.

 https://bjui-journals.onlinelibrary.wiley.com/doi/pdf/10.1002/bco2.468

Thanks for posting.....market seems to like the news so far today!

Small sample size a possible negative.....although a reputable organisation behind the research... and not funded by PEB!

PEB's legal case seems very strong.....inclusion in the AUA's new guidelines is likely the next boost needed to trigger a successful legal challenge.

( Caveat...  not a share for the faint hearted.)

[Greekwatchdog]

3rd Quarter Update

https://api.nzx.com/public/announcement/445506/attachment/436106/445506-436106.pdf

DUNEDIN, New Zealand – Cancer diagnostics company Pacific Edge (NZX, ASX: PEB) today announces tests processed at its laboratories in the three months to the end of December 2024 (Q3 25) were steady on the prior quarter (Q2 25).

Novitas' deliberations remained the overriding challenge to test volume growth, although the seasonal holiday slowdown also impacted volumes in the quarter. Against this, the addition of one FTE to the US sales team for the last month of the period, steady demand from our US customer Kaiser Permanente, the sustained benefits of our sales force efficiency gains, and an uplift in demand from the US clinicians most supportive of our tests diluted the impact of these factors.

Total laboratory throughput (TLT) in Q3 25 rose 0.7% to 7,092 tests from 7,042 tests in Q2 251. US TLT was 5,808 tests up 2.2% on the 5,682 in Q2 25. Our sales force efficiency metric was 379 tests per sales FTE, flat on the prior quarter.

Tests per unique US ordering clinician (our preferred metric for measuring customer commitment to Cxbladder) was up 9.1% in Q3 25 to 7.0 compared to 6.4 in Q2 25, while unique ordering clinicians in the quarter fell to 834 down from 890 in Q2 25.

These trends reflect the ongoing impact of Medicare uncertainty and the sales force efforts to maximise demand from Cxbladder's strongest supporters. Asia Pacific volumes were down 5.6% to 1,284 tests from 1,360 in Q2 25, a move that largely reflected the seasonal holiday slowdown in New Zealand.

The Q3 25 investor update also provides a detailed analysis of the finalized 'Genetic Testing in Oncology: Specific Tests' (L39365) Local Coverage Determination released on Thursday 9 January, and Pacific Edge's response to it including:

1. Our determination to pursue a preliminary injunction if our efforts to negotiate a withdrawal or revision to the finalized LCD prove unsuccessful
2. The path the company has set to regaining reimbursement certainty and our confidence of achieving that goal

We also highlight the recent successes we have had contracting with the BlueCross Blue Shield network of health insurers to make our tests 'in-network, creating a new non-Medicare revenue stream in the US.

Released for an on behalf of Pacific Edge by Grant Gibson, Chief Financial Officer.